fbpx

PROFILE

MY SUBSCRIPTION

LOGOUT

x

The latest industry news to your inbox.

    

I'd like to hear about marketing opportunities

    

I accept IQ Magazine's Terms and Conditions and Privacy Policy

Warner Music Group files for IPO

Label giant Warner Music Group (WMG), which owns a number of live assets in addition to its recorded music interests, has announced plans for an initial public offering (IPO).

The number of shares of common stock to be offered and the price of the offering have not yet been disclosed.

The announcement signals WMG’s return to the stock market, where it traded until 2011, before being bought by British billionaire Len Blavatnik through his company Access Industries for US$3.3 billion.

The news comes after the recent valuation of rival Universal Music Group at over US$30 billion, following Chinese entertainment giant Tencent’s acquisition of a 10% stake in the company.

The announcement signals WMG’s return to the stock market, where it traded until 2011

The Warner Music Group includes the records labels Warner, Atlantic, Elektra and Parlophone, publishing and global music distribution arms and is home to artists including Ed Sheeran, Cardi B, Dua Lipa and Bruno Mars.

WMG’s live music interests include concert discovery platform Songkick, Finnish promoter Warner Music Live and management company Umbrella Artists Productions, which it owns with promoter FKP Scorpio.

Morgan Stanley, Credit Suisse and Goldman Sachs are managing the flotation.

WMG’s filing with the US Securities and Exchange Commissions (SEC) can be read here.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.

Beijing’s music industry to be worth $17bn by 2025

The Beijing municipal government has unveiled plans to position the city as an “international music capital”, aiming for revenue from the Chinese capital’s music and related industries to reach ¥120 billion (US$17.2bn) by 2025.

The city, which generated ¥60bn, or $8.6bn, from its music industry in 2017 according to government officials, is to become the “global centre of Chinese music”.

The proposal calls for Beijing to build more small-sized live music venues, offer artists better copyright protections and increase development of its digital music industry.

The government guidelines also encourages innovation in music technology, including AI composition and “musical emotional recognition”. Separate plans will now be drawn up for the implementation of the policy.

According to a recent report by the China Music Industry Forum, the country’s music industry was worth more than ¥370bn ($53bn) in 2019, up 8% year-on-year.

“Interest in the local market has skyrocketed in recent years”

Chengdu, the capital of Sichuan province, has also been designated an “international music capital” by the government.

Kyle Bagley, owner of Chinese music industry marketing agency Groove Dynasty, told the South China Morning Post that government support could greatly benefit local musicians.

“Interest in the local market has skyrocketed in recent years, and with the success of the country’s home-grown music streaming platforms and growth in the live music sector, an initiative like this could help bring more money and stability to the budding industry, and increase interest from overseas in a major way,” says Bagley.

Dave Pichilingi, CEO of the UK and US division of Chinese entertainment company Modern Sky, is another to note the international potential for the Chinese music market. Speaking to IQ in July, Pichilingi said the level of opportunity is “especially huge” in China, although it currently remains “a relatively untapped marketplace” internationally.

Tencent, a leader in the Chinese entertainment and tech space, last week led a consortium in the acquisition of a 10% in Universal Music Group, in a deal which valued UMG at €30bn.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.

Tencent acquires U-Live stake with UMG buy-in

Vivendi and a consortium led by Tencent, the Chinese tech and entertainment giant, have finalised the consortium’s acquisition of a 10% stake in Universal Music Group (UMG), concluding talks than began last summer.

The acquisition values UMG at €30 billion, with members of the consortium including Tencent Holdings Ltd, Tencent Music (often referred to as ‘China’s Spotify’) and “certain global financial investors”, according to a joint statement.

The consortium has the option to purchase an additional up-to-10% stake in UMG at the same ‘enterprise value’ (the value of the whole company; ie €30bn) before 15 January 2021, while Tencent Music also has the option to acquire a minority stake in UMG’s business in so-called ‘Greater China’ (the PRC, including Hong Kong and Macau, plus Taiwan).

Pending regulators’ approvals, the transaction is expected to complete by the end of June 2020.

“Vivendi is very happy with the arrival of Tencent and its co-investors. They will enable UMG to further develop in the Asian market,” reads a statement from UMG’s French parent company, Vivendi.

“Together with Vivendi, Tencent and TME will work to broaden the opportunities for artists and to enrich experiences for music fans”

Tencent adds: “Tencent and the Consortium members are excited to support UMG’s growth through this investment.

“Together with Vivendi, Tencent and TME [Tencent Music Entertainment] will work to broaden the opportunities for artists and to enrich experiences for music fans, further promoting a thriving music and entertainment industry.”

The acquisition of a 10% share of UMG also gives Tencent a stake in U-Live, Universal Music’s live music arm, whose UK festival stable includes Love Supreme, the Long Road, Sundown and Nocturne.

UMG grew its revenues 17.5% in the nine months ending September 2019, the most recently available financial results, to over €5 billion (€1.8bn in Q3), bolstered by strong merchandise revenues and the success of artists including Ariana Grande, Taylor Swift and Billie Eilish.

Universal reports merchandise boom in 2019

Tencent – which, in addition to its music interests, leads the world in social media and videogaming – turned over CN¥312.7 billion (€40.2bn) in 2018, and employs nearly 60,000 people.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.

Vivendi moves forward with UMG sale

French media conglomerate Vivendi is in talks with Chinese tech group Tencent to sell 10% of its stake in Universal Music Group (UMG).

According to Vivendi, the deal would place UMG at a valuation of €30 billion. Tencent would also have the option of increasing its stake by another 10% in a year, at the same valuation.

Vivendi shares rose 9% in early trading today (Tuesday 6 August), following the announcement of Tencent negotiations and were up 6% to €25.4 at press time.

The French media company believes the deal with China’s Tencent could aid UMG growth through “digitilisation and the opening of new markets”. The company also hopes to improve promotion of UMG artists.

“Vivendi is keen to explore cooperation which could help UMG capture growth opportunities offered by opening of new markets”

The potential sale of a UMG stake has been discussed since 2018, with the plan being to sell the stake to “one or more strategic partners”, rather than via an IPO.

A statement from Vivendi states the media company will continue the process for the sale of an additional minority stake in UMG to other potential partners.

Recent Vivendi half-year financial results show UMG revenues up 18.6% to US$3.7bn, with music by artists including Ariana Grande and Billie Eilish performing particularly well.

The results also showed revenue from Vivendi’s live entertainment and ticketing unit, Vivendi Village, up 55% on a year-on-year basis to €66m.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.

‘Chinese Google’ Baidu eyes ticketing with blockchain platform

Chinese search engine giant Baidu has launched BaaS, an open blockchain platform designed for the “safe, efficient and inexpensive” trade of various items, including cryptocurrencies and digital tickets.

Baidu – which has been described as “China’s Google” and is the country’s most-visited website, as well as fourth in the world – says BaaS (Blockchain as a Service) is the most “user-friendly” blockchain service for businesses, and can be also be used to manage bank loans, credit cards, insurance and more.

The company claims the technology has already been successfully used to exchange and securitise assets, according to Russian website CoinSpot.

BaaS isn’t Baidu’s first blockchain-related venture: it has accepted payment in bitcoin for its web services division, Jiasule, since 2013.

Rival Chinese web conglomerate Tencent already has a blockchain platform of its own, while Alibaba – which has been steadily buying into the live entertainment business with the acquisition of ticketing service Damai and the launch of a booking agency and management company – is ploughing money into blockchain technologies for the food and healthcare industries.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.